Coventry council faces £17 million funding gap as inflation soars to 40-year-high

Cllr Richard Brown says he's committed to not cutting services but it's "getting harder and harder"



Soaring rates of inflation are putting Coventry city council's finances under pressure. The council has warned of "some significant financial challenges ahead" in its latest Outturn report which shows how much it spent over the last fiscal year.

Inflation had reached its highest level in 40 years (9.1%) in May and it is set to reach double figures before the end of the year. The hike means that supplies, contracts and pay will all get more costly for Coventry City Council and increase its outgoings significantly.

The council's revenue spending was within its budget for 2021-22, but it is now facing a funding gap of £17 million in 2023-24.

"For the first time in several decades, there is likely to be a marked inflationary impact on expenditure in 2022/23," the report stated. "The council will be able to draw upon a robust financial position which includes some provision for inflation but these are limited and will not be sufficient beyond the current year.

"The starting position for the council’s 2023/24 Budget is a gap of £17m although it is reasonable to expect that the impact of inflation will increase this."

Cllr Richard Brown, Cabinet Member for Strategic Finance and Resources, admitted that £17 million is a "daunting number". He said that while the gap itself is "not unusual" the inflationary pressures are "where we haven't been before."

Cllr Brown added he would to to avoid a cut in services, but could not categorically rule it out at this stage because it it is "getting harder and harder" to balance the books. However, he said a rise in council tax bills to pay for the shortfall is unlikely.

Coventry council Finance Manager Paul Jennings told CoventryLive: "Because we don’t get the government secondment until so late, what we don’t know is how much government grant in effect we’ll get. So that causes some of the £17 million gap.

"Ultimately when we get that settlement it may help to reduce that gap fairly significantly but it’s difficult to rely on that to be honest. So we always have to make plans on the basis that we might not get some of that additional money."

Now, just remind me, how much did the latest mayoral ceremony cost US?

Exactly what qualifications has Cllr Brown got for handling the job he currently enjoys?